Ethics Opinion 250

Duty to Turn Over Files of Former Client to New Lawyer When Unpaid Fees Are Outstanding

Assertion of a retaining lien on work product to secure payment by a former client of unpaid fees is disfavored and should be undertaken only where it is clear that all the conditions of Rule 1.8(i) have been met.

Applicable Rules

• Rule 1.8(i) (Lien on Client Files)
• Rule 1.16(d) (Termination of Representation)

Inquiry

From 1988 until 1993, Inquirer was a partner or counsel to a law firm in the District of Columbia, specializing in representing clients before the Federal Communications Commission (FCC). In 1993, he left that law firm and established a practice as a sole practitioner. Many of the clients served by Inquirer at his former law firm have “followed” him to his new sole practice and have authorized Inquirer to tell his former law firm that they instruct the firm to turn their files over to Inquirer. However, at least some of these clients have outstanding unpaid balances of fees owed to Inquirer’s former firm.

Inquirer raises a number of questions as to whether particular types of documents in the files of clients with unpaid fees owed to the firm must be turned over to him, per the client’s request, under Rule 1.16(d), or whether his former firm is entitled to withhold such materials as “work product” under Rule 1.8(i).

Discussion

The rules governing disposition of client files when a representation is terminated are reasonably clear. Under Rule 1.16(d) a lawyer is required to “take timely steps to the extent reasonably practicable to protect a client’s interests” in connection with termination of representation, including “surrendering papers and property to which the client is entitled.” Rule 1.16(d) also provides, however, that the lawyer “may retain papers relating to the client to the extent permitted by Rule 1.8(i).”

Rule 1.8(i), in turn, permits a lawyer to impose a lien (often called a “retaining lien”) upon a client’s files1 to secure payment of fees—but only to a very limited extent. Under DR 5-103(A) of the Code of Professional Responsibility, in effect in the District of Columbia through 1990, lawyers were broadly permitted to assert a retaining lien on a client’s files to secure payment of fees. But even this rule was interpreted narrowly by this Committee, which went so far as to suggest, in one opinion, that retaining liens should not be permitted. See Opinion No. 59 (undated), note 13. See also Opinion No. 119 (April 19, 1988), in which we described the retaining lien as “an unattractive and potentially quite harmful tool.”

These concerns were reflected in the adoption of the District of Columbia’s version of the Model Rules of Professional Conduct, effective in 1991. While Rule 1.8(j) of the ABA’s Model Rules broadly permits the assertion of liens on client files to secure payment of fees, the parallel provision of the D.C. Rules of Professional Conduct, Rule 1.8(i), is much narrower. It bars imposition of a lawyer’s lien on a client’s files, “except upon the lawyer’s own work product, and only to the extent that the work product has not been paid for.” Rule 1.8(i) further provides that the exception permitting a lawyer to withhold work product from the client does not apply when the client has become unable to pay the outstanding fee or when withholding the work product “would present a significant risk to the client of irreparable harm.” As discussed in our recent Opinion No. 230 (1992), the comments to Rule 1.8(i) and its “legislative history” emphasize that surrender of all files to the client at the termination of a representation is the general rule, and that the work product exception should be construed narrowly. Thus Comment [9] emphasizes that only “materials generated by the lawyer’s own effort” are included within the work product exception and that not all work product can be withheld “merely because a portion of the lawyer’s fees had not been paid.” Similarly, Comment [10] notes that the possibility that a client “might irretrievably lose a significant right or become subject to a significant liability because of the withholding of the work product” constitutes irreparable harm, requiring that the work product be surrendered even if the fees are unpaid.

In sum, it seems clear to us that retaining liens on client files are now strongly disfavored in the District of Columbia, that the work product exception permitting such liens should be construed narrowly, and that a lawyer should assert a retaining lien on work product relating to a former client only where the exception is clearly applicable and where the lawyer’s financial interests “clearly outweigh the adversely affected interests of his former client.” D.C. Bar Op. 59, supra.

With these principles in mind, we turn to the specific questions raised by the Inquirer.

The Inquirer asks first whether particular categories of client files fall within the work product exception of Rule 1.8(i). We agree with the Inquirer that files containing copies of applications filed with the FCC and amendments and correspondence relating to those applications—also filed with the FCC—are not within the work product exception. Regardless of their initial status, once such materials are filed with a public agency, they are not work product. Similarly, we agree with the Inquirer that files containing pleadings filed with the FCC and authorizations issued by the FCC do not constitute work product. We also agree that documents prepared by persons outside the law firm (e.g., pleadings filed by other parties, newspaper articles, press releases) and correspondence from the client or third parties to the law firm obviously do not constitute work product, since they were not prepared by lawyers or other personnel of the law firm. Finally, copies of correspondence previously sent to the client should not be withheld, in our view, even though such copies might be considered work product in a technical sense.2

On the other hand, we believe that materials such as drafts of pleadings, applications or other documents, notes of meetings and research memoranda and materials constitute work product eligible for the Rule 1.8(i) exception so long as they were prepared by a lawyer or other employee of the law firm.

The Inquirer also asks about the scope of the work product lien when a client, at the time of termination of the representation, has paid some but not all of the lawyer’s or law firm’s fees. As Comment [9] makes clear, not all of the work product can be withheld merely because a portion of the lawyer’s fees has not been paid. Where the unpaid fees can be identified on a temporal basis, it is relatively easy to apply Rule 1.8(i): only work product produced during the period for which fees remain unpaid may be withheld. Thus, for example, if a terminated client has paid fees through 1992, and outstanding fees relate only to work done in 1993, the law firm may withhold only work product produced in 1993. Where the time period covered by unpaid fees cannot be clearly identified, the lawyer may withhold only work product that clearly has not been paid for.

Finally, the Inquirer notes that some of his clients have advised his former firm that, because of the Inquirer’s “continuing need to respond to FCC inquiries and requirements in a timely fashion in (the client’s behalf), your withholding any portion of the work product of the [client’s] files would present a significant risk of irreparable harm to my interest.” The Inquirer asks whether this assertion by the client is binding on the former firm, precluding it from invoking a Rule 1.8(i) lien on unpaid work product. We believe that, while such an assertion by a former client must be given great weight by the firm, it is not conclusive. A lawyer must make his or her own judgment as to whether the client will be irreparably harmed if the work product is withheld. Of course, the lawyer must give the client the benefit of the doubt if the question is a close one.

Inquiry No. 93-6-13
Adopted: October 18, 1994

1. Rule 1.8(i) does not address the question of when a lawyer may assert a retaining lien against client property other than files in the lawyer’s possession; that issue is presumably governed by statutory or common law of the jurisdiction.
2. If the lawyer wishes to keep copies of files sent to a former client, the lawyer must bear the cost of making such copies. See D.C. Bar Op. 168 (April 15, 1986).